Google Boosted by Strong Earnings, Stock Split

Updated from 4;26 p.m. EST to provide comments from the conference call in the second and sixth paragraphs.

NEW YORK ( TheStreet) - Google(GOOG) shares are rocketing in after-hours trading after the company reported better-than-expected earnings and issued a 2-for-1 stock split.

Google reported first-quarter earnings of $10.08 a share on revenue of $8.14 billion, excluding traffic acquisition costs (TAC). Total revenue came in at $10.65 billion. Revenue in the U.S. grew 22% year-over-year to $4.9 billion, while revenue outside the U.S. grew 26% year-over-year to $5.8 billion.

CEO Larry Page struck a positive note on the quarter in the press release discussing the results. "Google had another great quarter with revenues up 24% year on year. We also saw tremendous momentum from the big bets we've made in products like Android, Chrome and YouTube," he explained. "We are still at the very early stages of what technology can do to improve people's lives and we have enormous opportunities ahead. It is a very exciting time to be at Google."

The company said cost-per-click, (CPC), a key metric, fell approximately 12% from the first quarter of 2011 and decreased approximately 6% from the fourth quarter of 2011.

On the conference call, Patrick Pichette, Google's CFO, said the CPC decline does not "reflect the fundamental strength in our business". He noted CPCs are down for five reasons: a combination of mix effect, foreign exchange effect, emerging market ad rates versus developed markets, changes in ad quality and Google.com versus Google properties. Pichette noted that the bidding behavior for ads, which Google considers to be an important signal, is growing.

Google also announced that it would be creating a new class of stock, effectively issuing a stock split that is "designed to preserve the corporate structure that has allowed Google to remain focused on the long term." On the conference call, Page said that many investors have asked for a stock split, and this effectively grants it to them.

As of March 31, Google had $49.3 billion in cash, cash equivalents, and short-term marketable securities. It had 33,077 full-time employees, up from 32,467 full-time employees in the prior quarter. Google's operating cash flow in the quarter was $3.7 billion, and its free-cash-flow was $3.1 billion.

Google shares are moving higher in extended trading, up 0.32% to $653.10, according to Nasdaq.com. The company's shares finished the regular trading session up 2.37% to close at $651.01.

Interested in more on Google? See TheStreet Ratings' report card for this stock .